Polesworth Garage

Polesworth Garage

Car Finance Frequently Asked Questions

Car finance can seem complicated, hopefully the frequently asked questions below will help you understand.

Further information on Hire Purchase, Personal Contract Purchase and Lease Purchase is available on our Car Finance Explained page.


Q1. What types of car finance do you offer?

We offer various ways to finance your next used car, including:

  • Hire Purchase
  • Personal Contract Hire
  • Lease Purchase


Q2. Can I use my current vehicle as the deposit on my next used car?

We would be happy to accept your old car as deposit on your next used car:

  • With or Without MOT
  • Finance Settled
  • Any Age or Mileage
  • Any Make
  • Any Model


Q3. Are your car finance rate competitive?

We offer some of the lowest rates available, including:

  • Hire Purchase from 6.9% APR
  • Weekly 0% Finance Deals
  • Bad Credit Finance Deals


Q4. Do you perform a credit check if I apply?

We perform a credit check on all applicants.


Q5. How long does it take for you to make a decision?

We can usually provide an in-principal decision within 1 hour. The final decision will be dependent on the type of finance you require, your income and ability to pay along with the results of any credit check we perform:

  • In Principal Decision within 1 hour
  • Easy Online Application
  • Apply by Phone, Email or In Person


Q6. Can I get car finance if I’m self-employed?

We are happy to offer competitive rates to self-employed individuals, including:

  • Company Directors
  • Contractors
  • Tradesmen
  • Delivery Drivers
  • Builders & Ground-workers
  • Gardeners


Q7. Can I get car finance if I have bad credit?

We are happy to offer competitive rates to applicants with poor credit subject to income and the ability to pay, you will need:

  • Proof of Name
  • Proof of Address
  • Proof of Income (Pay Slips / Bank Statements)


Q8. Do you have a wide selection of cars available?

We usually have in excess of 200 quality used cars on-site with prices ranging from under £1000 to almost £250,000, including:


Q9. What identification will I need to provide?

We accept the following as identification:

  • Photocard Drivers Licence
  • Government Issued Passport
  • Government Issued ID Card
  • Armed Forced ID Card


Q10. What do I need to bring as proof of address?

We accept any 2 of the following as proof of address:

  • Recent Bank Statement (Within 3 months)
  • Recent Utility Bill, BT, British Gas etc (Within 3 months)
  • Government Documentation (Within 3 months)


Q11. What do I need to bring as proof of income?

We accept the following as proof of income:

  • Last 3 months wage slips
  • Bank Statements (3 months if self-employed)


Q12. How do I make my monthly payments?

We can accept payment in a number of different ways, somewhat dependent on the car finance you require, including:

  • Direct Debit
  • Standing Order
  • Credit / Debit Card
  • Cash


Q13. Do I need a deposit?

Depending on the type of car finance you require you may or may not be required to pay a deposit which is not normally more than 10% of the purchase price:

  • Hire Purchase
  • Personal Contract Hire
  • Lease Purchase
  • 0% Car Finance


Q14. How do I apply for car finance?

You can easily apply for finance using any of the following methods:

  • Online using the button on any vehicle page
  • Call us on 01827 895 125
  • If you have good credit Pre-authorise your Car Finance – Here


Q15. I have been turned down for car finance before. Can I still apply?

We are happy to look at anyone’s circumstances with a view to offering them competitive car finance, including:

  • If you’re Self Employed
  • If you’re on a Low Income
  • If you have Bad Credit
  • If you have No Deposit
  • If you’ve been Turned Down Before


Q16. What does APR mean?

The APR shows the annual cost of a finance agreement over and above the amount you have borrowed. The APR will include interest rate charges and any other fees included in the agreement, such as administrative fees. By law, the APR must be shown on relevant documentation presented to customers in showrooms. You can use the APR to compare the cost of different finance products.:

  • APR = Annual Percentage Rate


Q17. What is a balloon payment?

A balloon payment is the lump sum (also known as a Guaranteed Minimum Future Value) deferred to the end of a finance agreement in Personal Contract Purchases, Lease Purchases or similar agreements. It completes the finance agreement and allows you to take ownership of the car. You may be obliged to pay a balloon payment under some agreements, while it is optional under others – so be sure to check which type of agreement best serves your needs.:


Q18. What is a Credit Agreement?

A credit agreement is a legally-binding contract between the customer and the finance company. It must include details of the loan amount, the term, rates of interest, other charges and your rights and responsibilities for the duration of the agreement. You will receive a copy of the agreement you have entered into.:


Q19. What is a Credit Rating?

A part of the scoring system used by finance companies to help them decide how to price the risk of doing business with you, and arrive at a suitable interest rate.:


Q20. What is Fixed Rate?

This means the same interest rate is charged for the duration of the agreement.:


Q21. What is GAP insurance?

If your car is involved in an accident, your insurer will only pay for its current market value. GAP insurance can help cover the difference between the market value of the car and the amount of outstanding finance under your credit agreement (Finance GAP), or the original purchase price of the car (Return to Invoice GAP). There are various types of GAP insurance on the market, so shop around and choose a product to suit your needs.:

  • GAP = Guaranteed Asset Protection


Q22. What is Guaranteed Minimum Future Value?

This is where a percentage of the total cost of the car is deferred until the end of the contract. The forecast value of the car is assessed by the finance company at the beginning of the agreement. This is known as the Guaranteed Minimum Future Value. In agreements such as Personal Contract Purchase, it is important to be realistic with your estimates of how many miles you expect to cover each year as this will help determine the GMFV (as well as the length of the agreement). See also Balloon Payment.:


Q23. What is Hire Purchase?

Hire purchase (HP) is a popular car finance product. When taking out an HP agreement, you pay an initial deposit, then a fixed monthly repayment over a set number of months. Although you become the ‘registered keeper’ of the car, you are only hiring it and you don’t actually own it until you have made the final repayment (including any administration or option to purchase fee).:


Q24. What is Lease Purchase?

Lease Purchase is a form of Hire Purchase agreement under which a sum is deferred until the end of the contract. This is determined by the projected age of the car and the forecast mileage. Unlike with Personal Contract Purchase (PCP) agreements, the deferred amount (also referred to as a balloon payment) is not optional and must always be paid.:


Q25. What is an option to purchase fee?

A voluntary payment at the end of some finance agreements (such as hire purchase) which, if paid, transfers ownership of the car from the finance company to the customer.:


Q26. What is Personal Contract Purchase?

Personal Contract Purchase (PCP) is a form of hire purchase agreement, which includes a voluntary “balloon” payment at the end. This final amount represents the future residual value of the car, based on the age of the vehicle at the end of the agreement and the forecast mileage. Monthly repayments are generally lower under a PCP agreement than a comparable HP agreement because of this deferred amount. With this type of agreement, payment of the future value of the car is optional. it must be paid if you wish to own the car outright, but you could simply decide to hand the keys back and start another agreement for a different vehicle.:


Q27. What is the Term?

This is the length of time over which you agree to repay the amount of finance you have borrowed.:


Q28. What is a Variable Rate?

This means that the interest rate can go up or down depending on the Bank of England’s interest rate during the term of your finance agreement. This type of finance agreement is more common in the mortgage market. We do not charge fees for our Consumer Credit Services. We may receive a payment(s) or other benefit from finance providers should you decide to enter into an agreement with the finance provider.:


For the answers to any other questions you may have call us on 01827 895 125 and we would be happy to help.